Yukon North Of Ordinary

News archive for December 16, 2013

Firm fined for years of diesel leakage, soil damage

A failed Watson Lake sawmill took another blow last week when a judge ordered South Yukon Forest Corp. to pay a $12,000 penalty for years of diesel leakage and soil contamination from a tank on its property.

By Christopher Reynolds on December 16, 2013 at 3:46 pm

A failed Watson Lake sawmill took another blow last week when a judge ordered South Yukon Forest Corp. to pay a $12,000 penalty for years of diesel leakage and soil contamination from a tank on its property.

The company, embroiled more than 10 years ago in a failed $67-million lawsuit against the federal government, pleaded guilty to two environmental breaches.

These included failing to take “all reasonable measures” to repair the spill, restore the area to its previous condition and obey environmental protection orders, according to the Yukon Environment Act.

Company director Don Oulton was not in court to hear the ruling.

The tank was “leaking a small amount of diesel,” noted territorial court Judge Michael Cozens.

The judge said the penalty should be used “solely for the purpose of remediating the land.”

The amount, suggested by both parties in a joint submission, will be paid to the lands branch of the Department of Energy, Mines and Resources.

“The volume of contaminated soil is unknown,” said government lawyer Julie Desbrisay.

“The diesel leak has been continuous since 2006,” she said, though the effects are not assumed to be detrimental.

The judge cited case law stating the penalty should reflect the severity of the damage and the potential to restore the natural environment to its prior condition.

The government has been aware of the leak since 2006, when a natural resources officer inspected the site after discovering soil contamination in 2005.

Subsequent inspections and letters to Oulton noted a “small but growing” stain on the soil and his lack of effort to address the problem or comply with environmental protection orders — first sent out in 2010.

At one point, Oulton told the government he had arranged for a contractor to pump diesel from the leaking tank.

This was true, but only half the diesel was removed and the leak continued.

The judge said the government made “numerous attempts to have South Yukon Forest Corp. repair the leak, remove the soil and remediate the land.”

The company has no prior record of prosecutions against it, though “this is a corporation ... that is certainly well-known in the Yukon courts,” Cozens said.

In December 2012, the Supreme Court of Canada decided not to hear an appeal on a ruling by the Federal Court of Appeal that dismissed a $67-million settlement awarded to South Yukon.

The Federal Court handed down that initial settlement in 2010 following 40 days of trial for the company’s lost investment and economic opportunities.

Justice Elizabeth Heneghan originally ordered Ottawa to pay South Yukon’s legal costs, as well as interest on the $67 million.

The company sued Ottawa in 2002, claiming the federal government failed to deliver on a promise permitting South Yukon to log enough timber to operate its mill profitably in the late 1990s.

The suit’s ultimate failure saw 125 investors — more than 80 of them Yukoners — lose out on their gamble.

South Yukon was in operation from 1998 to 2000.

It is still technically registered, though likely to be struck from the corporate registry shortly, the judge said last week.

Two additional charges against the company were stayed along with all four identical charges against Oulton.

CommentsAdd a comment

trevor braun

Dec 16, 2013 at 9:52 pm

Good to have some accountability but what is lacking is accountability of the natural resource officer and department who’s job it is to enforce the rules and look out for the land for us. They first noted the leak in 2005 protection orders sent out in 2010 like wtf?? and then charges finally wrapped up in court in Dec of 2013?  I think some more people should also be on the hook here.


Dec 18, 2013 at 12:18 pm

The forestry industry in the Yukon is a bit of a joke all around. It relies on government subsidies and cries for more when they aren’t given enough harvesting forest to make a profit. Actually it sounds a lot like the Yukon agriculture industry. The Yukon soil is low in nutrients and growing season. It’s time people realized that and stopped using it as an excuse to exploit government for hand outs.

@Trevor - good point Trevor! That’s pretty ridiculous

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